In the Matter of
Part 4 of the Real Estate Agents Act 2008
And
In the Matter of
Complaint No: CA3895464
In the Matter of
Ms S
Licence Number: XXXXXXXXX
Decision of Complaints Assessment Committee
Dated 9 March 2011
Complaints Assessment Committee:
CAC10052
Chairperson: Jo Hughson
Deputy Chairperson: David Russell
Panel Member: Pat Waite
Complaints Assessment Committee
Decision to take no further action
1.
Background
1.1. The complainant (Mr H) is 76 years old and resides in Auckland. Mr H‟s complaint arises
from matters relating to the sale of his property at Property A in Otahuhu East (“Property A”)
in late 2009/early 2010.
1.2. The written complaint has been made formally against Licensee, Ms S (“the Licensee”) of
Auckland. The Licensee holds an active salesperson licence and works for ABC Limited in
the company‟s Greenlane office in Auckland.
1.3. The complaint also includes a number of allegations against Mr S. Mr S holds a salesperson
license and works in the Otahuhu branch of ABC in Auckland. In addition criticisms are made
of the conduct of the Otahuhu Branch Manager („Otahuhu Manager‟) and the Manukau
Branch Manager („Manukau Manager‟).
2.
Complaint – Summary of Key Facts and Allegations
2.1
Mr H bought the subject property from a Mr F of XYZ Construction for $450,000 in August
2007. Mr F is a property developer. The property was situated in a development which Mr F
was undertaking.
2.2
At some later stage (date not given) Mr F approached the complainant and advised that he
was having financial difficulties. The upshot of that was the complainant paid a $10,000
deposit on another property which Mr F was developing at that time (at Property B), on the
condition that the complainant sold his property at Property A and paid no more for the new
property than the sale price of his Property A property.
2.3
At some stage in 2009 (date unclear) Mr F approached the complainant again and advised
him he was in further financial difficulty and that his Bank would only advance funds to
enable him to complete two houses on his development, if the complainant proceeded to
purchase the Property B property for which he had paid the $10,000 deposit on the agreed
$495,000.00 sale price. The complainant agreed to proceed with the purchase of that
CAC Decision to take no further action
9 March 2011
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property and it was at that time that Mr F introduced him to the Licensee, Ms S. The
Licensee had a sole agency agreement for the sale of properties in Mr F‟s developments.
2.4
The complainant agreed the Licensee could act as his agent for the sale of his Property A
property and he maintained she agreed to charge him the same commission rate as she
usually charged Mr F, which Mr H claimed was “in the region of $14,000”.
2.5
Mr H signed an agency agreement with ABC on or about 27 October 2009. At the time he
signed the agreement he noticed it made no mention of “the special rate of commission”
which he maintained he had agreed with the Licensee. The complainant claimed that he
raised this issue with Mr F and voiced his concerns about the commission rate specified in
the agreement (which was the standard rate). He also maintained he voiced his concerns to
the Licensee who, he stated, assured him that the “discounted rate” would apply at the point
of sale of his property.
2.6
During the marketing for sale of Mr H‟s Property A property Mr S of the Otahuhu Branch of
ABC was brought on board to assist the Licensee, at the complainant‟s request. Mr S was a
friend of the complainant‟s. The complainant alleges that there were problems with the
advertising which Mr S was responsible for, including:

The advertisement which was placed in the Property Press listed the address of the
property as Property A, Otahuhu and not Property A, Otahuhu East. The complainant
stated that was important because a motorway bisects the two roads;

The signage which was erected outside the complainant‟s gate did not include the
internet reference/computer ID for the property; and

The property was not listed under Otahuhu on the internet search which he conducted
for his property on the ABC open homes listing. When he complained about this the
Licensee was said to have assured him this would be corrected but for “three weeks in a
row the house remained off the computer. I was paying for this very poor service from
ABC”;
2.7
The complainant also alleged that Mr S told him Otahuhu was not a good place to own a
property and that Papatoetoe and Onehunga were better suburbs; that Mr S “kept running
down Otahuhu”. Further, the complainant contended that Mr S was lazy to the point where “I
had to deliver flyers”. The complainant then asked the Licensee to ensure that Mr S had no
further involvement in the sale of his property.
CAC Decision to take no further action
9 March 2011
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2.8
On 12 January 2010 the complainant signed a new agency agreement with ABC for the
auction of his property. The auction was held on 10 February 2010. There was one bidder at
the auction. The bidder, Mr K, offered $445,000 which Mr H rejected. Later that day, Mr S sat
with Mr K and obtained a signed offer of $450,000 from him which he then delivered to the
Licensee, Ms S, to present to the complainant.
2.9
Mr H maintained that he was subsequently advised (date not given) by Mr F that prior to the
auction the Licensee had received an offer of $450,000 from the same buyer who had been
present at the auction, but that the Licensee had not forwarded this to him (Mr H). The
complainant at that point withdrew his property from the market.
2.10 Shortly thereafter the complainant was approached by Mr F and advised that he was again in
financial difficulties. The complainant agreed to allow Mr F to sell his property at Property A
provided Mr F made up any difference in the price obtained and that price they had agreed
for the purchase of the Property B property.
2.11 On 27 March 2010 Mr H‟s property was sold through an ABC salesperson from the Manukau
Branch for $445,000. The Manukau Branch claimed full commission. The complainant stated
that Mr F did not make any attempt to pay the complainant the shortfall between the sale of
his property and the purchase price of his new Property B property, as he maintained had
been agreed between them.
2.12 The complainant alleged the Licensee, Ms S had wrongly advised him that the house next to
his new property was purchased for $520,000 (a Quotable Value search which he later
conducted showed that it had actually sold for $510,000).
2.13 On or around 5 May 2010 Mr H held back $3000 of the commission which ABC claimed was
payable in respect of the sale of his property. In June 2010 ABC took action against Mr H in
the Disputes Tribunal to recover this sum. The complainant counterclaimed for $10,000 in
relation to the reduction in price received due to the alleged poor marketing of property and
the “conduct of the agents from (ABC‟s) Greenlane and Otahuhu offices”. The outcome of
this action was the complainant was ordered to pay the $3000 he had been withholding. At
the Disputes Tribunal hearing on 2 August 2010 Manukau Manager (also of ABC) was said
to have advised the Tribunal that the Licensee had not told Mr H he would receive the same
commission rate as Mr F/XYZ Construction and that the Licensee denied she had wrongly
advised him (Mr H) the property next door to his new property in Property B was sold for
$520,000. The complainant maintains that Mr Manukau Manager lied to or misled the
Disputes Tribunal in these respects.
CAC Decision to take no further action
9 March 2011
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2.14 On 16 August 2010 in response to Mr H‟s enquiries, the Otahuhu Manager of ABC emailed
Mr H a copy of the offer Mr S had obtained on 10 February 2010 for his Property A property.
Mr H then made this available to the Manukau Manager who confirmed subsequently that the
highest bid received at auction was $450,000 and the highest offer after the auction was
$450,000. Mr H then corrected the Manukau Manager (who had not been present at the
auction) that the highest bid at auction was in fact only $445,000. The complainant
maintained that the first he knew of the $450,000 offer obtained by Mr S after the auction,
was at the Disputes Tribunal hearing in August 2010.
3.
Information and Material Considered
3.1
The Real Estate Agents Authority (“the Authority”) received Mr H‟s complaint against the
Licensee on or about 10 September 2010.
3.2
The Authority referred the complaint to the Complaints Assessment Committee. Pursuant to
section 79(1) of the Real Estate Agents Act 2008 (the Act), on 23 September 2010 the
Committee considered the complaint under section 79 and determined to inquire into it. The
Committee noted that some of the conduct the subject of the complaint occurred prior to the
Act coming into force. The Committee was satisfied that section 172 of the Act operated to
enable it to consider that conduct in the context of its investigation of Mr H‟s complaint.
3.3
The Committee invited the Licensee to provide a written response to the complaint and this
was received on or around 11 October 2010. Written responses were also received from Mr
S (on the same date), the Otahuhu Manager (now retired) and the Manukau Manager.
3.4
The essence of the Licensee‟s response, corroborated in the main by the responses from the
other licensees referred to above, was:
i.
Mr F was a good client of the Licensee‟s. She was contacted by him to assist one of his
employees (the complainant) to sell his property at Property A. Mr F advised the
Licensee the complainant was purchasing another property which was being built in his
Property B development;
ii.
A listing agreement was drawn up with a “minimal advertising budget”. The Licensee
told the complainant his price expectations in the high $400,000‟s were “optimistic”.
The complainant asked the Licensee to work with Mr S from the Otahuhu Branch on
the basis he would do the local work like the open homes, and the Licensee would do
the administration work;
CAC Decision to take no further action
9 March 2011
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iii.
In early 2010 the complainant decided to try and sell his house by auction. A three
week auction marketing plan was developed. A Mr K was the only person displaying
any interest in the property;
iv.
At auction on 10 February 2010 Mr K was the sole bidder for $445,000, which fell short
of the price the complainant wanted;
v.
That evening Mr S obtained a post auction offer from Mr K for $450,000. The Licensee
confirmed Mr S gave her the offer to present to the complainant because Mr H had
become “cold towards [Mr S].” The Licensee tried to contact Mr H the following two
days to be advised by Mr H that things had changed and Mr H did not have to sell; and
further that if the offer she had was not for $475,000 then “don‟t bother with an offer”;
vi.
The Licensee visited Mr H on the Saturday (13 February 2010) to discuss Mr K‟s post
auction offer. Mr H advised that “I don‟t need to sell” and he was not interested in the
offer she had. The Licensee maintained Mr H claimed he did not really want to sell his
property in the first place but he had been forced to in order to purchase the Property B
property which he stated he no longer wanted;
vii.
“Only days later” the Licensee was advised the sale of the complainant‟s property was
back on, and she was asked to get Mr K “back together to get another offer”. The
Licensee went to the complainant‟s property that evening for a “quick tidy up”. The
following day she and Mr S brought Mr K back through the property and after the
viewing Mr K advised he wished to pursue another property;
viii.
During the marketing campaign Mr H had asked the Licensee what the neighbouring
property on Property B had sold for. The Licensee maintained she told Mr H she did
not know as she was not involved in that transaction;
ix.
Mr H was not happy his Property A property was being marketed as Otahuhu East
rather than Otahuhu. This was changed immediately “out of respect” for Mr H;
x.
The property was at no stage removed from the website listing and at the Licensee‟s
own cost it was added to the open home line up in the Property Press;
xi.
Mr H was pleased to deliver the flyers he paid to have made up before the auction to
save himself the $60 delivery fee. When no one new came to the next open home Mr H
was critical of the fact the Licensee had not distributed flyers earlier. The Licensee
stated that at the time the listing agreement was signed it had been agreed between
her and Mr H the focus was on listing in the Property Press;
CAC Decision to take no further action
9 March 2011
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xii.
The marketing budget shows costs were kept down and the Licensee stated she had
“even put in my own personal money”;
xiii.
Mr F does not get a special commission rate from the Licensee/ABC. The Licensee
had agreed Mr H would be charged the same commission which is charged to Mr F,
which is the standard ABC rate. The Licensee believes Mr H was confused in believing
Mr F received a special rate when he does not (the Licensee not being permitted to
authorise special commission rates);
xiv.
Any suggestion the Licensee and Mr F were anything other than in a
vendor/salesperson relationship was incorrect;
xv.
“[Mr H] entered into an agreement with [Mr F] to purchase another home from him to
help [Mr F] and unfortunately it did not work out in [Mr H‟s] best interest.
3.5
On 9 December 2010 the investigator assisting the Committee with its enquiries was advised
by Mr F (who was spoken to) that it was he, and not the Licensee, who had given the
complainant misleading information on the sale price of the neighbouring Property B
property. Although Mr F had advertised that property for $520,000 it had sold for $510,000
(as confirmed by the sale and purchase agreement).
3.6
A significant amount of documentation was obtained by the Committee. This included
information from the Licensee‟s file in respect of the sale of the complainant‟s Property A
property (including details of the marketing programme and costs, a copy of the Property
Press advertisement for the auction of the Property A property; and the listing agreement for
the neighbouring Property B property). Email correspondence between the parties before Mr
H made his complaint was also obtained. The complainant made available a copy of an
email he had sent to the Licensee advising when he was first made aware of the $450,000
post auction offer by Mr F after the Disputes Tribunal hearing, one of 250 auction flyers
which the complainant distributed with the „correct address‟, promotional and auction flyers
with “incomplete address”, a photograph of the open home signs without the website ID, and
a letter from Mr F to ABC querying the amount of commission paid on the sale of the
complainant‟s Property A property. the Manukau Manager provided a copy of the post
auction offer of $450,000 referred to above, the open home and auction register in respect of
the Property A property, and a commission statemenht in relation to the sale of that property.
A copy of the sale and purchase agreement for the complainant‟s Property B property was
obtained (confirming a purchase price of $495,000) as was a copy of the agreement for sale
and purchase of the neighbouring Property B property confirming the purchase price of
CAC Decision to take no further action
9 March 2011
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$510,000 and the standard commission which was charged to the vendor which was Mr F‟s
company. A copy of the Disputes Tribunal decision was also before the Committee.
3.7
A number of individuals were interviewed during the Committee‟s investigation including the
complainant, the Licensee and her colleagues referred to above and Mr F. The Committee
was satisfied that all relevant information was obtained.
4.
Hearing
4.1
Having received the Licensee‟s written response to the complaint and the other information
described above, and having satisfied itself that it had completed its inquiry into the
complaint, on 7 February 2011 the Complaints Assessment Committee conducted a hearing
with regard to the complaint, under section 89(1) of the Act.
4.2
The hearing was conducted on the papers pursuant to section 90 of the Act. In accordance
with section 90(2) the Committee made its determination on the basis of the written material
before it as referred to above.
5.
Complaints Assessment Committee Determination and Reasons
5.1
The Committee has made a determination under section 89(2)(c) of the Act to take no further
action with regard to the complaint or any issue involved in the complaint.
5.2
The Committee is not satisfied it has been proven to the required standard that the Licensee
(or any of her colleagues) is guilty of unsatisfactory conduct as that term is defined in section
72 of the Act.
5.3
On the key issues the Committee found as follows:

It had no reason to doubt the Disputes Tribunal finding that although the complainant
may have understood he had agreed a lower commission, the complainant was not told
by the Licensee that a special commission rate would be charged to him. Rather the
Committee considered the complainant was more likely than not to have been assured
by the Licensee that he would be charged the same commission rate as Mr F/XYZ
Construction is charged, which is the standard ABC rate. This standard rate was
specified in the relevant listing agreements which Mr H signed;
CAC Decision to take no further action
9 March 2011
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
The complainant was not misled by the Licensee as to the sale price of the neighbouring
Property B property. It was Mr F who conveyed wrong advice to the complainant on that
issue, as Mr F admitted in the context of the Committee‟s enquiry into Mr H‟s complaint;

There has been no breach of Rule 6.4 of the Code of Professional Conduct and Client
Care in relation to these matters;

The Committee preferred the Licensee‟s account as to the steps she took to draw to the
complainant‟s attention the post auction offer obtained by Mr S, on or around 13
February 2010 (when the Licensee visited the complainant at his property and advised
him about the offer, which he declined to look at). In all the circumstances the Committee
was satisfied she had taken appropriate steps in this regard.

There has been no breach of Rule 9.13 of the Code of Professional Conduct and Client
Care in relation to this issue;

In relation to the complaints about the way in which the Property A property was
marketed by the Licensee and the allegation of “poor advertising” the Committee had
regard to the Disputes Tribunal‟s observations but made its own findings on these
matters and whether or not the Licensee met appropriate professional standards for the
purposes of the Act. The Committee was satisfied that while the marketing may not have
been to the standard the complainant might have been entitled to expect from an agency
with a reputation like ABC, on balance it could not be said in all the circumstances that
any aspect of the conduct amounted to “unsatisfactory conduct” as that term is defined
in section 72;

The Committee was satisfied that the complainant‟s property was not listed on the open
homes register/listing initially but that was because the complainant had not agreed to
this (or to meet the costs of this) when the promotion and auction marketing campaigns
were prepared (and when the property was eventually listed on the open home listing
this was at the Licensee‟s cost);

The Committee accepted the initial advertising and the flyers delivered by Mr S
contained the address of (incorrect address of Property A) rather than Property A when
from the complainant‟s perspective this was incorrect. However, as soon as this was
drawn to the attention of the Licensee steps were taken to correct/rectify this situation
and the word “East” was added to the advertised address.
CAC Decision to take no further action
9 March 2011
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
The other allegations relating to poor advertising (for example, the omission of the
computer ID on sign) were considered to be insignificant and/or minor and, in the main,
corrected when brought to the attention of the Licensee.

On balance the Committee considered these errors were minor. In any event, as soon as
they were brought to the attention of the Licensee and/or her colleagues they were
rectified. For example, the flyers which the Licensee prepared and the complainant
delivered subsequently bore the correct address (Property A);
5.4
It is clear there are outstanding issues between the complainant and Mr F. The complainant
may well decide now to explore the nature of any legal avenues available to him to assist in
resolving those issues. Those are matters entirely for him. They are not issues which the
Committee is able to resolve.
6.
Publication
6.1
One of the functions of the Complaints Assessment Committee is to publish its decisions
(section 78(h)).
6.2
The Committee has determined that this decision should be published in the interests of
ensuring the disciplinary process remains transparent, independent and effective. The
Committee also regards publication of this decision as desirable for the purposes of standard
setting.
6.3
The Committee hereby authorises the Authority to publish this decision by whatever means it
considers appropriate provided that the names and identifying details of the complainant, the
Licensee and any other third parties named or otherwise identified in the decision are omitted
from publication. The names of any properties referred to in the decision should also be
omitted from publication.
CAC Decision to take no further action
9 March 2011
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7.
Right of Appeal
7.1
A person affected by a determination of a Committee may appeal to the Disciplinary Tribunal
against a determination of the Committee within 20 working days of the date of this notice.
7.2
Appeal is by way of written notice to the Tribunal. You should include a copy of this Notice
with your Appeal.
7.3
Further information on lodging an appeal is available by referring to the Guide to Lodging an
Appeal at www.justice.govt.nz/tribunals.
Signed
Jo Hughson
Chairperson
Complaints Assessment Committee
Real Estate Agents Authority
Date: 9 March 2011
CAC Decision to take no further action
9 March 2011
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